Michigan Attorney General Dana Nessel said Tuesday that an income tax rate cut expected to be triggered for the 2023 tax year by the state’s high revenue will be temporary and return to the normal rate the following year.
Nessel’s opinion, which the state is expected to follow, comes after the State House Fiscal Agency predicted in January that Michigan’s revenues would be high enough to automatically see an income tax rate cut from 4.25% to 4.05% under an Act of trigger 2015 . The reduction will save Michigan taxpayers an estimated $700 million.
The law, then enacted by the Republican-controlled Statehouse, provides a mechanism to reduce the income tax rate if the percentage increase in the general fund exceeds the rate of inflation during a fiscal year.
MICHIGAN SENATE PASSES TAX PROPOSAL, WILL NOT INCLUDE $180 CHECKS FOR TAXPAYERS
“Because this situation is temporary, it makes sense that instead of providing a permanent tax reduction based on the economic circumstances of a single tax year, the legislature would also only intend to provide taxpayers with temporary relief,” Nessel, a Democrat, wrote in a to the State Treasurer Rachel Eubanks directed statement.
In a joint statement released with other Republican leaders, Nessel said, former Gov. Rick Snyder, who ran Michigan from 2011 to 2019, said the law “was intended to be a permanent reduction, activated when the state government had a large surplus.” had”.
“The state government is sitting on $9 billion of your money and the Democrats are fighting tooth and nail to keep every penny of it from you,” Republican Senate leader Aric Nesbitt said on social media.
GOVERNMENT OF MICHIGAN. WHITMER PLANS TIGHTER GUN LAWS, REMOVAL OF ABORTION RESTRICTIONS AND TAX REALIASES
Last month, Democratic Gov. Gretchen Whitmer unveiled a record $79 billion budget for fiscal 2024 after her budget director Chris Harkins predicted in January that Michigan’s surplus could surpass $9 billion by the end of the year. Whitmer also announced plans to send all taxpayers “inflation relief checks” worth $180, which would have cost the state about $800 million and cut revenue enough to avoid the trigger.
With a narrow majority in both houses, Democrats failed to secure the votes needed to send $180 checks out this year, and Senate Majority Leader Winnie Brinks, a Democrat, had said the income tax cut was “probably”. triggered.
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Democrats managed to pass legislation that phased out taxes on public and private pensions and significantly expanded the state’s earned income tax credit to 30% of the federal rate from the current 6%.
Source : www.foxnews.com